Whether you see them or not, industrials businesses play a crucial part in our daily activities. But this role also comes with a demand profile tethered to the ebbs and flows of the broader economy. Thankfully, industrial end markets were stable over the past six months as the industry’s 9.6% gain has nearly mirrored the S&P 500.

Regardless of these results, investors should tread carefully. The diversity of companies in this space means that not all are created equal or well-positioned for the inescapable downturn. With that said, here are three industrials stocks boasting durable advantages.

TransDigm (TDG)

Market Cap: $73.19 billion

Supplying parts for nearly all aircraft currently in service, TransDigm (NYSE:TDG) develops and manufactures components and systems for military and commercial aviation.

Why Are We Backing TDG?

1. Core business is healthy and doesn’t need acquisitions to boost sales as its organic revenue growth averaged 17.4%

2. Performance over the past two years shows its incremental sales were extremely profitable, as its annual earnings per share growth of 36.9% outpaced its revenue gains

3. TDG is a free cash flow machine with the flexibility to invest in growth initiatives or return capital to shareholders, and its rising cash conversion increases its margin of safety

TransDigm is trading at $1,302 per share, or 33.5x forward price-to-earnings. Is now the time to initiate a position? See for yourself in our comprehensive research report, it’s free.

Wabtec (WAB)

Market Cap: $34.01 billion

Also known as Wabtec, Westinghouse Air Brake Technologies (NYSE:WAB) provides equipment, systems, and related software for the railway industry.

Why Is WAB a Top Pick?

1. Existing business lines can expand without risky acquisitions as its organic revenue growth averaged 12.3%

2. Incremental sales significantly boosted profitability over the last two years as its annual earnings per share growth of 24.6% outstripped its revenue performance

3. Free cash flow margin increased by 6.2 percentage points over the last five years, giving the company more capital to invest or return to shareholders

Wabtec’s stock price of $194.16 implies a valuation ratio of 24.1x forward price-to-earnings. Is now the right time to buy? Find out in our full research report, it’s free.

FTAI Aviation (FTAI)

Market Cap: $13.27 billion

With a focus on the CFM56 engine that powers Boeing and Airbus’s planes, FTAI Aviation (NASDAQ:FTAI) sells, leases, maintains, and repairs aircraft engines.

Why Will FTAI Beat the Market?

1. Impressive 70.6% annual revenue growth over the last two years indicates it’s winning market share during this cycle

2. Incremental sales over the last two years have been highly profitable as its earnings per share increased by 81.4% annually, topping its revenue gains

3. Free cash flow margin has improved over the last five years, showing the company is becoming a more self-sustaining business

At $129.05 per share, FTAI Aviation trades at 31.3x forward price-to-earnings. Is now a good time to buy? See for yourself in our in-depth research report, it’s free.

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